Still Not Playing With A Full Deck

Jim Cramer just...my lord.  The man puts the "blithering" in blithering idiot.  Here's how he plans to fix the housing collapse:

“With the right push from the president of the United States, virtually all the negatives we're fretting about today could partially be fixed,” said Cramer. “The president has enough firepower to blast aside the obstacles standing in the way of higher stock prices ... and a stronger economy. We just don't know if he has the will or the inclination.”

Cramer said it’s hard to imagine Obama acknowledging the stock market, let alone embracing it. But the “Mad Money” host thinks the president, who campaigned on “change,” has the power to turn the markets around.

Take disappointing July existing-home sales, for example. What an impact Obama could have made if he had said he’d do everything in his power to increase the demand for housing and tried to convince the American people that, with lower home prices and interest rates, it’s a good idea to buy a house right now, Cramer said. Obama also could have told the country that Federal Reserve Chairman Ben Bernanke saw this coming and is keeping mortgage rates low to sop up the excess housing stock.

Excuse for thinking that Cramer's plan consists of "Obama needs to clap harder and everything will be fine!"

Jim, let me explain something to you.

Obama saying "it's a great time to buy a house!" isn't going to fix the 9.5% unemployment rate.  It's not going to make the bank magically lend to people. It's not going to solve the fact that Joe and Jane have been trying to sell their house for 2 years now and can't find a buyer at the price they need to charge to end up not losing tens of thousands of dollars in equity (or maybe hundreds of thousands.)

It's not going to fix the fundamental problem we have with the housing market, which is IT HAS COLLAPSED COMPLETELY.

Jesus.  Not to mention if Obama did do that, the Republicans would yell SOCIALIST GOVERNMENT INTERVENTION and attack him anyway.

Really?  Obama needs to tell people to go buy houses?  With what money, genius?

Sew The Wind, Reap The Whirlwind

Islamophobia is all in your head, America.

The New York Police Department has confirmed to TPM that a cab driver in Manhttan was allegedly stabbed by a passenger who asked if the cabbie was Muslim, and says the incident is being treated as a hate crime. The suspect has been charged with attempted murder and other crimes.

According to Detective Marc Nell, at 6:12 pm last night, the driver picked up Michael Enright, 21, of Brewster, NY, at the intersection of 24th Street and 2nd Avenue in Manhattan. The cab proceeded to drive north, and Enright asked the driver, who Nell identified as a 43-year-old Asian male, if he was Muslim. After the driver responded that he was, Enright allegedly stabbed him repeatedly with a Leatherman tool, according to police.

"[Enright] stabbed the driver in the throat, right arm, left forearm, right thumb and upper lip," Nell said.

According to police, the driver called 911, and stopped the cab on 3rd Avenue between 40th and 41st streets, managing to lock Enright inside until police arrived. 

All in your head.

Waiting now for the screeching wingers to say that Enright here was a liberal working for George Soros, because as we all know, Islamophobia is a myth created by the Left.

Meanwhile, is the President really a Christian?

Digby has more on why these crazy Leftist Saul Alinsky minions had to provoke people by admitting to being Muslim.

[UPDATE] And it's Politico's Ben Smith with the story that Enright "works for a pro-Park51 group" while kind of failing to mention that the guy was part of a group that was filming US military exercises in Afghanistan...and that he was a volunteer, not an employee.

But it doesn't matter, it was all a publicity stunt by ACORN to smear Real Americans, right?

Home, Home I'm Deranged Part 9

Yet more bad housing news, this time in new home sales hitting their lowest rate...

Ever.

New U.S. single-family home sales unexpectedly fell in July to set their slowest pace on record while prices were the lowest in more than 6-1/2 years, government data showed on Wednesday.

The Commerce Department said sales dropped 12.4 percent to a 276,000 unit annual rate, the lowest since the series started in 1963, from a downwardly revised 315,000 units in June.

Analysts polled by Reuters had forecast new home sales unchanged at a 330,000 unit pace last month. 

"What we are seeing is the downside of government intervention. It had fanned expectations of a market bottom when in fact, it created a false bottom," said Tom Porcelli, a senior economist at RBC Capital Markets in New York. "We expect home sales to stay at this remarkably low range with remarkably high unemployment. There is also little demand for lending." 

Little demand for lending with mortgage rates also at record lows?  Over 12 months supply of housing on the market?  And now new homes hitting the lowest rate ever recorded?

This isn't a housing depression.  It's a complete meltdown.

Islamophobia Is All In Your Head, Apparently

Salon's Alex Pareene has finally had enough of Jonah Goldberg's idiocy on the Park51 project.

Jonah Goldberg, whose columns are apparently published in grown-up newspapers for consumption by literate adults, uses today's to expand on a theme that he first toyed with at The Corner last week: Liberals are the real intolerant ones because they make up "Islamophobia" and accuse Real Americans of it.

Here's the lede:

Here's a thought: The 70% of Americans who oppose what amounts to an Islamic Niketown two blocks from ground zero are the real victims of a climate of hate, and anti-Muslim backlash is mostly a myth.

First: "an Islamic Niketown"? What ... what does that mean? Will there be shoes for sale? Are Americans objecting to the commercialization of the sacred ground near but not adjacent or particularly related to the former site of the World Trade Center, where a complex of commercial office building are currently being constructed? Couldn't Goldberg, who is Jewish and from New York, have come up with an analogy that actually helped explain to his readers what he is talking about?

The data backing up Goldberg's thesis? FBI hate crime statistics. That's it. There were only 481 hate crimes against Muslims in 2001, "the year a bunch of Muslim terrorists murdered 3,000 Americans in the name of Islam on Sept. 11," Jonah helpfully reminds us. ("Now, that was a hate crime," he adds, because he is a truly execrable columnist.)

Ahh, the old "If you point out bigotry, you're the bigot!" excuse.  Gosh, it's been a whole couple of hours since I've seen that one dragged out.

If more than half of Americans want to deny American Muslims their constitutional rights, and somehow that isn't Islamophobia, then what is it, exactly?  A misunderstanding of the Constitution?  A hidden clause in the text in really, really tiny print?  A mulligan?  What?

I just don't get it.  I really don't.  I understand the human capacity for self-delusion and justification is nearly infinite, but really?  Goldberg is this stupid?

Pension Tension In Illinois

While a lot has been made of the country's largest state employee pension fund (CALPERS) in California possibly going under and causing massive damage to the economy (especially when the Governator is raiding it to try to balance the state's budget), let's not forget there are plenty of other states out there with multi-billion dollar employee pension funds that are in no small amount of trouble.  One of them is Illinois.

Two few months ago we disclosed how the Illinois Teachers' Retirement System (TRS) was doing all it can to become the next AIG. In addition to, or maybe precisely due to, its deplorable fundamental condition, which can be summarized as being 61% underfunded on its  $33.7 billion in assets, with a performance record of down $4.4 billion in 2009 and 5% in 2008, the fund, courtesy of a detailed analysis by Alexandra Harris of the Medill Journalism school at Northwestern, was found to be on its way to trying to become a veritable self-made TBTF: as was described then, "TRS is largely on the risky side of the contracts, selling and writing OTC derivatives, including credit default swaps, insurance-like contracts that guarantee payment in the event of a default." In other words, TRS was selling substantial amounts of derivatives, which held the fund's other assets as hostage in case the collateral calls started coming in, as should the market broadly decline, the value of the downside derivatives would "increase" and the seller (in this case TRS) would need to pledge ever more collateral against these wrong way bets.

That's right, folks:  Too Big To Fail isn't just for banks anymore!  If you've got tens of billions now riding on the Big Casino (especially in the President's home state!) and you lose, the expectation is that the Government will cover your losses.  After all, Obama can't afford politically to leave some 300,000 plus teachers in the state high and dry with no retirement funds in his own backyard, yes?

The problem is that all those Big Casino bets are about to go bad along with the rest of the economy.

Alas, at this point it is too late: for TRS, and likely for many, many other comparable pension funds, which had hoped that the Fed would by now inflate the economy, and fix their massively incorrect investment exposure, the jig may be up. As liquidations have already commenced, the fund is beyond the point where it can "extend and pretend", and absent the market staging a dramatic rally, government bonds plunging, and risk spreads on CDS collapsing, the fund is likely doomed to a slow at first, then ever faster death. Then one day, Goldman's risk officers will call the TRS back office, and advise them that due to its "suddenly riskier profile" established in no small part courtesy of Goldman's investment allocation advice, the collateral requirements have gone up by 50%. The next step is either Maiden Lane 4... or not. For the sake of the 355,000 full-time, part-time and substitute public school teachers and administrators working outside the city of Chicago, we hope that the TRS has now been inducted into the hall of the Too Big To Fail, as otherwise roughly $34 billion in (underfunded) pensions are about to disappear.

And the thing to remember is that Illinois isn't alone. A lot of there states out there along with other pension funds are in the same boat, hoping to have hit the TBTF jackpot by now.  When, not if, the market tanks, these funds are going to be left high and dry and millions of employees counting on those pensions along with them.

And it's going to get really ugly.  Fast.

More Primary Impetus, The Morning After

Outside of the too close to call contest in Alaska, Johnny Volcano McCain cruised to victory in his primary in Arizona...

With 11% of precincts reporting, McCain leads by 59%-30%, and has been projected as the winner by the Associated Press.

As we noted this morning, McCain was heavily favored to win going into today. To his credit, McCain recognized early on that there was a restive environment among the GOP base, shifted to the right, and refocused himself to not lose that crowd to the anti-illegal immigration champion Hayworth -- and he also outspent Hayworth by a ratio of about 10-1.

...and Democrat Kendrick Meek got the primary win to face Marco Rubio and Charlie Crist...

With 38% of precincts reporting, Meek is leading Greene 55-32. Also-ran former Miami Mayor Maurice Ferre has 6% of the vote. Meek is now set to take the stage in a general election fight where, essentially, two men are vying for the Democratic vote -- Meek and Gov. Charlie Crist, who has run hard for Democratic support since abandoning the GOP primary against Marco Rubio. 

...but the other major story is the Florida GOP primary for governor, and the Tea Party has collected another head.

Only in America: $50 million dollars of his personal fortune later, Rick Scott is the Republican gubernatorial nominee in Florida, the AP projects. Though Florida Attorney General Bill McCollum spoke moments ago and did not concede, with 90% of precincts reporting, Scott leads McCollum 47-43, and the AP and CNN have called the race.

...but Rick Scott may be the Hoffman Effect story of 2010.

The mainstream Republican party had a reason to fear Scott. He carries with him the baggage of the $1.7 billion in federal fines leveled against his company, Columbia HCA, for Medicare fraud. Plus he's extremely conservative, which could be a tough sell in a general election fight.

But in the end, all the establishment's horses and all of its men couldn't put McCollum together again. His campaign -- never all that exciting in the best of circumstances -- simply couldn't raise the support needed to push McCollum past Scott's big money and conservative message.

Now, after a brutal primary, the GOP has a nominee that not a whole lot of general election voters are fond of. The TPM Poll Average for the general election fight shows Democratic nominee Alex Sink leading Scott 34.7-27.8. 

So can a Medicare fraudster trying to buy a Governor's seat win in a state like Florida?  We'll find out.

Has Moose Lady Hoffmaned Alaska?

The major surprise in last night's primaries is that Sarah Palin may indeed have the star power in her own home state to bring down fellow Republican Sen. Lisa Murkowski, and like 2008's general Senate election in the state, this one's going to go down to absentee ballots in an election where nearly everyone was expecting Murkowski to win solidly.

Unofficial returns as of this morning -- with 84.2 percent of precincts reporting -- showed Miller leading with 45,188 votes to Murkowski's 42,633 votes. That's Miller 51.5%-Murkowski 48.6%. What's more, the votes outstanding are from rural areas and 8,400 so-far-unreturned absentee ballots, so the final result won't be known for at least a week and might be undetermined until Sept. 8.

Whichever Republican wins, conventional wisdom takes a hit. As we reported, broad consensus both in Washington and Alaska was that Murkowski would win by a wide margin. If the senator pulls it off, it will be very close. There were few public polls, and they all showed Murkowski in the lead.

We took a look at several internal polls as well, which also showed her besting Miller. But Miller's folks sounded very confident this week in an interview with TPM. He had the backing of former Gov. Sarah Palin, conservative groups and the tea party.

The Anchorage Daily News reports this morning that Miller credited Palin last night.

If Murkowski had won easily despite Sarah Palin, it would have basically been the end of the line for Palin's popularity after a number of her endorsed candidates went down in flames along with her own favorability numbers.  But this situation (as much as it galls me to say it) gives her a massive boost:  Palin has all but singlehandedly removed Lisa Murkowski from office and that means she's very much back in the game.

Despite being personally unpopular, she has all but driven out a Republican incumbent Senator.

Things just got real interesting.

[UPDATE] Per Steve M. in the comments, the Daily Beast drops the other snowshoe:

The ongoing battle for who won the Republican primary in the Alaska Senate race will come down to the absentee ballots, but in an exclusive interview with The Daily Beast, a source within the Murkowski campaign says they know of one possible legal option to pursue a third-party run. If Murkowski is not victorious when the absentee ballots are counted and decides to wage an Independent party bid, they might consider using this option, which the source wouldn't describe, but did confirm they were seriously looking at.

"We are going to take a look at them and see whether the option is there or not, but it's a decision she (Murkowski) has to make," the Murkowski camp source said. "There is an option I know of."

Oh my.  A Murkowski independent bid might actually give Alaska two Democratic Senators...and oh yes, Miller hasn't officially won yet, either.  I wouldn't quite pop those corks yet, Palinistas.

StupidiNews!

• Former president Jimmy Carter has arrived in North Korea to try to secure the release of an American sentenced to hard labor.
• Police in Moldova have arrested several people in connection with nearly 2 kilos of stolen uranium discovered in a garage in the country's capital.
• More and more colleges are tuning to dress codes and guidelines in order to eliminate "distractions" from learning.
• The luxury car market is really taking off these days due to the improving economy...in Russia, at least.
• A new study finds that web site warning signs indicating that information may be compromised may actually convince users to give that information up.

Last Call

Via the Rumpies:



To all those who say "I support the First Amendment but I don't think you should build your place of worship here," please do me a favor and read your Constitution.

I really don't care if 70% of America agrees with that statement or not. It just means 70% of Americans are depressingly ignorant of how the Constitution works.

Educate yourselves or risk losing it.

Another Milepost On The Road To Oblivion

Here's why I'm pissed off about Obama not doing more on unemployment.  Not to put too fine a point on it, but the unemployment numbers among white Americans is actually about 8.6%.

For African-Americans it's 16.6%.  That's unacceptable.  That's one in six, which means the real numbers are closer to 30%, maybe 33%.  One in three African-Americans in the job market is unemployed or underemployed is my honest guess.

For white teenagers, it's 23.2%.   That's bad enough.

African-American teenagers?  The official numbers are 44.2%.  The real numbers?  Well over half.  60% maybe.  Who knows.

Black America has been in a depression for several years now.  Odds are really good that it's going to get worse and soon.

There's a reason why there's no sense of urgency on Capitol Hill.  Whose fault is it?  Too many to blame and no sense in assigning it.  But no real sense that anything's really, really wrong in "America" yet.

They've only got 8.7% unemployment, dig?

Steele Running Away

Unlike Josh Marshall I personally think Michael Steele will make it all the way to Friday before he has to apologize to the GOP again for his latest bout of stupidity.

In an interview with Spanish-language network Univision, RNC Chairman Michael Steele distanced his party from Arizona's controversial new immigration law, saying, "The actions of one state's governor is not a reflection of an entire country, nor is it a reflection of an entire political party."

"We hope, now that this debate is in full bloom, level heads will prevail and that we'll reach a common sense solution with regards to immigration," Steele said.

He's toast.  Wouldn't this be funny if this really was the last straw that gets Steele fired?  Won't happen, I mean if they haven't fired him by now, they're not going to.

Now, come January 2011 this may be a different story, especially considering the RNC's major money problems, but considering that Michael Steele and the RNC are irrelevant now compared to Karl Rove's fundraising operations, at this point it doesn't matter what happens to Steele, does it?

Zandar's Thought Of The Day

Me, June 2009:

Despite all the overwhelming evidence to the contrary, CNBC's Jim Cramer has officially called a bottom to the housing market.

Man, I love these old comedy reels, don't you?
 

But here's the reality of the situation:

• Unemployment will most likely increase to above 10% very soon, with the U-6 pushing 18, possibly 20%.
• The second wave of forclosures caused by unemployment and resetting ARMs is already underway.
• Increased pressure on banks will come from the ongoing commercial real estate collapse.

All these will combine for a perfect storm in the second half of the year and into 2010. Housing prices will continue to fall, not stabilize. Buying into a recovery right now, especially a strong recovery, is a lethal mistake. More havoc will continue to spread across the country...and if housing starts are truly on the way back up, the supply of unsold homes on the market will only continue to increase.

That means housing prices have to fall. I said back in May that housing starts had to continue to fall under May's record lows, not rebound from them.

Cramer's not only wrong, but he should be fired. I'll keep revisiting this one to see how badly Cramer's call has failed.

Part of me is having a really good chuckle right now.  Then I remember what me being right actually means, and I'm not so happy anymore.

Also, Cramer's still an idiot.

Drop The D-Word On Them

D-D-D-D-Depression, as David Rosenberg makes his case.

Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."

"Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said. 

The 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent, sending the stock market to a 50 percent rally in early 1930 as investors thought the worst had passed.

"False premise," Rosenberg said. "And guess what? We may well be reliving history here. If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3%."

Rosenberg's warning comes as a slew of major analysts—Goldman Sachs and JPMorgan among them—have slashed GDP projections for 2010 to the 1.5 to 2 percent range.

Rosie's just being honest here.  We've been in a hole going on 32, 33 months now.  Today's housing news just confirms the worst is still ahead and that the "Obama boom" was nothing more than the mother of all dead cat bounces.  We never got out of the "recession" of 2008, really.

If anything, today's news all but proves it.  We're in a depression and it's well past time to admit it.

The Mask Slips Again

...and a Republican tells the truth about what will happen if they take back the House, in this case GOP Ohio Rep. Jim Jordan.

AUDIENCE MEMBER: Assuming it’s accurate that Republicans will get the House, how effective will that be in throwing a monkey wrench in the gears of everything Obama does?

JORDAN: If we win, what will we get done? Mostly, I’ll be honest, most of what we can get done is have the big fight, have the big debate, and have the framework for the 2012 election.

What, you thought the Republicans had a plan to try to do anything to fix America's problems other than to blame Obama for the next two years?

Really?  Obama Derangement Syndrome is all they have to offer.

Orange Julius Versus Timmy

Looks like GOP House minority leader John Boehner has decided to move on from the SCARY GROUND ZERO MOSQUE to switching attack vectors to something that actually does matter and something that does deserve to hurt the Democrats: going after Obama's failed economic team in a speech in beleaguered Cleveland.

Boehner, delivering what his aides billed as a major economic address, will say President Obama's team lacks "real-world, hands-on experience" in creating jobs, according to a draft version of his speech that was released in advance. The Republican lawmaker plans to cite reports that some senior aides complained of "exhaustion," including the recently departed budget chief Peter Orszag.

"President Obama should ask for - and accept - the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council," Boehner says in the prepared remarks, which are scheduled for delivery at the City Club of Cleveland shortly after 8 a.m. The mass dismissal, he adds, "is no substitute for a referendum on the president's job-killing agenda. That question will be put before the American people in due time. But we do not have the luxury of waiting months for the president to pick scapegoats for his failing 'stimulus' policies."

Boehner's demand for the ousters of Geithner and Summers is likely to be met with derision in the West Wing, and denounced as mere electioneering less than 75 days before the midterm election. Calls for cabinet officials to be fired is nothing new for the party out of power -- during the Bush administration many Democrats called for the ouster of Defense Secretary Donald Rumsfeld, a demand that was not met until Democrats swept the 2006 midterms.

Boehner is seeking to personalize mounting concerns among voters about Obama's handling of the economic recovery. In his speech, he argues that Obama's advisers unfairly highlight brief signs of marginal improvement to suggest a coming surge in job creation.

"The American people are asking, 'where are the jobs?' and all the president's economic team has to offer are promises of 'green shoots' that never seem to grow," Boehner says, according to the text. "The worse things get, the more they circle the wagons and defend the indefensible." After the speech, he is scheduled to participate in a question-and-answer session with business leaders in this economically distressed Rust Belt city.

And you know what? I can't argue against Boehner here. I've called for Geithner's firing long ago. Hell, I objected to Geithner from day one. Larry Summers on the other hand needed to have been shown the door last year for his complete mishandling of the stimulus package. Both these men have been awful and with unemployment hovering around 9.5% and real unemployment approaching 25% in some counties, these guys have failed across the board in getting a real economic strategy in place.

This is unfortunately for the Dems a completely legitimate avenue of attack against Obama, and you're going to see a lot more of this as we head towards the fall.  I don't see how Obama can continue to defend Geithner or Summers for much longer given the jobs and housing picture.

As much as it causes physical pain for me to admit it, John Boenher is right.  These two need to be fired because they have failed.

[UPDATE] And as Atrios tweets:  

liberals have been pointing out shortcomings of geithner and summers for some time, only a righty can make it an issue

Sad but true.